Help Wanted

Benefits extensions and retraining are not sufficient to address the staggering level of unemployment now facing Americans.

October 7, 2009

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President Obama caught a break when the International Olympic Committee rejected his personal appeal to stage the 2016 games in Chicago. The minor ruckus diverted attention, at least for a day, from the dire news that unemployment had reached 9.8 percent. But in the long run, unemployment, especially if it hits double digits, will define, and potentially undermine, Obama’s presidency.

The 9.8 percent figure may be a twenty-six-year high, but it’s actually a lowball fantasy. The number of Americans who cannot find work now tops 15 million; the number working part-time jobs because they can’t find full-time ones is above 9 million. Add frustrated job seekers who have long since given up looking, and the Bureau of Labor Statistics puts the unemployment/underemployment rate at 17 percent.

That figure is jarring, as is the prospect that the country could experience a W-shaped recession, taking another dive before it climbs back up. If Obama’s “green shoots” recovery withers, he will long for the happy days of 2009.

Except for a military threat, no issue confronting a president is more serious than widespread unemployment. Without movement toward job creation, many Congressional Democrats could find themselves on the unemployment line after the 2010 election. The party’s key gains in 2006 and ’08 came in Great Lakes and Midwestern swing states, now reeling from sharp job losses. If Democrats suffer serious setbacks in just a handful of industrial states, Obama’s ability to act on a range of issues will be more constrained than it is now.

Savvy members of Congress recognize the urgency. House Education and Labor Committee chair George Miller of California is entertaining wise proposals to increase funding for employment and training of low-income youth, an especially hard-hit group. There are also proposals to extend unemployment benefits, which is crucial since the unemployed now spend on average more than twenty-six weeks looking for work, the longest stretch since the Labor Department began collecting this data in 1948.

But unemployment benefits extensions and retraining schemes are not sufficient. Americans need jobs–millions of them–and if the private sector is not going to create them, then the government must. Facing record budget shortfalls, states and municipalities have had to lay off record numbers of public workers and are also in dire need of aid from Washington. One promising idea involves extending tax credits to businesses that hire more workers.

Call it a second stimulus or a new New Deal. But the administration and Congress cannot delay, and they cannot get spooked by deficit projections–the perennial excuse for inaction. As former Labor Secretary Robert Reich puts it, “The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some. This is the only way to put Americans back to work…. When one out of six Americans is unemployed or underemployed, this is no time to worry about the debt.”

When talk of green shoots turns into jobs and prosperity for ordinary Americans, there will be time to focus on debt reduction. But widespread and expanding unemployment cannot be ignored any longer. The president must go for the gold: he must propose sweeping initiatives to keep the jobs America has and create the jobs America needs.